IN Technology

Bankers said the IPO had attracted strong initial demand partly because it provided an exposure to unlisted companies like the US social networking site.

In addition to its Russian assets, Mail.ru owns a 2.4 per cent stake in Facebook, 5 per cent of US voucher site Groupon and 1.5 per cent of online gaming company Zynga.

People working on the deal said they expected about half of the listing’s investor base to come from the US, where technology investors are seeking to tap into Russia’s growing internet market.

Mail.ru owns the second and third largest social networking site in Russia and has a stake in the biggest. It owns the largest e-mail portal in the country.

Some analysts have questioned the high valuation of Mail.ru.

“No one knows what the value of this company is,” said Steven Dashevsky, a founding partner of Dashevsky & Partners, a Moscow-based investment fund. “It’s pretty scary that this is coming to market with [such a high multiple].”

Mail.ru said its would be selling 16 per cent of its shares in the form of depositary receipts, which would be priced at $23.30-$27.70 each.

At the midpoint of the valuation range, Mr Dashevsky said Mail.ru would trade at about 40 times 2010 earnings, if the company’s US stakes are taken into account.

People close to the company said it was selling shares in the form of depositary receipts because UK listing rules require companies to float a stake of at least 25 per cent, or have an existing wide investor base.